Urban income inequality and social welfare

Arbeitspapier

When income inequality increases when average income levels increase, rises in average income levels might result in inequality costs. This paper develops marginal social welfare measures that account for the possibility that income inequality changes when average income levels change. Applications are given for the city of Amsterdam, The Netherlands. For this city, the income elasticity of the Gini is estimated in the range 0.25-0.48. Estimates of marginal welfare changes vary greatly with model choice. For plausible cases, estimates can be negative, raising doubts whether average income increases are beneficial in rich urban areas with high valuations of equality where income inequality increases in income.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. TI 2023-009/VIII

Classification and Topics

• Classification: Wirtschaft ; Relation of Economics to Social Values ; Allocative Efficiency; Cost-Benefit Analysis ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
• Subject: Social welfare ; income inequality ; inequity aversion ; post-growth

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Koster, Paul
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/273820
• Last update: 10.03.2025, 11:43 AM CET